Joint Bank Accounts: Pros and Cons

Whether you and your spouse choose to have joint bank accounts or separate ones, you are going to be making an impact on your family budget and, in a way, making a statement about how you think of money (and other things). To help make this important decision, it’s a good idea to take stock of the pros and cons. Here are some ideas about the pros and cons of joint bank accounts, and how it affects the household budget.

1. Pros

First, let’s look at the pros of having joint bank accounts.

* It’s convenient. You don’t have to “go through” another person to make a purchase or pay bills.

* You and your spouse may be able to save money faster for the simple reason that twice the income (or more income) is coming into the account, which leaves more for saving.

* Communication is necessary for a joint account or accounts to go smoothly. For many couples, this is an asset – it acts as an avenue toward better communication between them.

* Being willing to share an account with your spouse could be interpreted as a gesture of trust on the part of both parties. It says you’re willing to be transparent with your money, and for some couples, this can be an enhancement to their relationship.

2. Cons

There are some drawbacks to having joint bank accounts. Here are some to consider.

* One spouse tends to become the financial manager, which is a burden he/she may resent.

* For some couples, privacy is important, even if it’s so you can buy a surprise gift for your spouse.

* Coordinating expenditures can be tricky with a joint account. Both spouses need to keep clear records so that the account doesn’t get overdrawn.

* Arguments could potentially ensue if one or the other party is irresponsible with his or her spending; suddenly, it becomes “You spent our money” rather than “You spent your money.”

How It Affects the Household Budget

When it comes to budgeting, whether or not you have joint accounts will make a significant impact. For instance, separate accounts mean that you have to look at two separate sets of records of expenditures and income to form the budget. For couples who have separate accounts for privacy, there will need to be two separate household budgets, which can get a bit dicey.

A joint account may actually make budgeting easier. You only have one set of records to look at, and while you both may be bringing home an income, the income becomes one stream that’s easier to track.